Liquidator seeks more funding in hunt for $600 million in British pyramid scheme

LONDON (Reuters) - Liquidator Grant Thornton is seeking litigation funding to step up its hunt for 500 million pounds invested in UK company Euro Forex, which Chinese police have said was a pyramid scheme.

Reuters reported in 2016 how Euro Forex, or EuroFX, allegedly scammed thousands of investors in China and other countries. EuroFX had a British CEO and headquarters and has since been wound up. https://www.reuters.com/article/us-china-investment-eurofx-specialreport/special-report-how-british-firms-built-a-pyramid-scheme-in-china-that-lost-millions-idUSKCN10N0WE

A pyramid scheme does not make real investments, but instead uses cash from new investors to pay older ones.

Grant Thornton was appointed liquidator in July 2017, and is representing nearly 3,000 investors. It has not yet managed to find any of the missing EuroFX money, it said in a progress report filed with the UK companies registrar last month.

"We are in discussions with a litigation funder," David Ingram, partner at Grant Thornton, told Reuters, without naming the company or saying how much funding he was looking to raise. He said he hoped to secure the funding in 6-12 months.

Litigation funders, such as London-listed Burford Capital <BURF.L>, pay some or all of the costs of a legal case in return for part of the proceeds.

Additional funding would enable the firm "to conduct a more thorough and more extensive investigation", the filing said. Ingram declined to comment further on the nature of the investigation.

Grant Thornton is representing 2,939 claimants with a total investment of 475 million pounds, the filing showed. Ingram said it was not possible to say how many people invested in EuroFX overall.

The liquidation followed a petition to the courts by creditor Sun Yao, who is represented by law firm Dentons.

Ingram and Neil Griffiths, partner at Dentons, said they remained hopeful of recovering money, despite the length of time the process is taking.

"We haven’t given up, the investigation continues," Griffiths said.

Reuters reported in 2017 that prosecutors in Anshan, northern China, dropped an investigation into David Byrne, the British chief executive of the scheme, and allowed him to leave the country, a year after he was apprehended in a citizen’s arrest by an investor.

(Reporting by Carolyn Cohn; Editing by Nick Macfie)